Airlines slow to adopt cloud technology, but still time to upgrade.
Airlines slow to adopt cloud technology, but still time to upgrade.
Embracing the Cloud: How the Travel Industry is Catching Up to Other Sectors
The travel industry, including airlines, hotels, airports, and car rental services, has historically lagged behind other sectors when it comes to adopting cloud computing. However, things are starting to change as industry players recognize the potential for improved operational efficiencies and customer service through cloud technology. While challenges remain, the benefits are becoming increasingly apparent.
One of the key advantages of cloud computing in the travel industry is the ability to automate processes and create better customer experiences. As David Linthicum, Deloitte’s chief cloud strategy officer, points out, many travel companies are playing catch-up in the digital world. In comparison to their counterparts in healthcare, retail, and manufacturing, they have been slower to invest in automation and are not spending as much on technology upgrades. However, the potential for automation in the travel industry is huge, and cloud solutions can drive the necessary improvements.
Cloud technology has already brought about significant changes in the travel industry. For example, kiosks at airports have simplified the check-in process, while mobile boarding passes and digital hotel room keys allow guests to bypass the front desk. These innovations have improved operational efficiency and enhanced the customer experience.
According to Accenture, only 30% of travel companies have implemented cloud technology at scale, with an additional 35% in the process of implementation for specific purposes. The slower progress in the travel industry can be attributed to the lower-margin nature of the business and the challenge of integrating new technology with legacy systems. As Massimo Morin, from Amazon Web Services (AWS), explains, the travel industry is complex, and there is a considerable amount of legacy technology that needs to be addressed.
However, there are success stories that showcase the benefits of cloud adoption in the travel industry. Delta Air Lines, with the help of AWS, modernized its contact center to streamline customer service. By recognizing the caller’s phone number and matching it with the reservation, the identification process became smoother. The technology also enabled the prioritization of high-status and loyal customers, as well as those with imminent departures, reducing wait times.
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Air Canada partnered with AWS to enhance its mobile app. The app now allows customers to use their miles for purchases, such as Starbucks coffee at airport terminals or booking an Uber. This not only strengthens customer loyalty but also reduces the airline’s financial liability as deferred revenue.
Hilton, a hospitality giant, has undergone a significant transformation thanks to cloud technology. The company migrated its property management system, Hilton OnQ, to the cloud, enabling seamless updates and more frequent deployments. This has reduced guest wait times and allowed employees to engage more with guests, exemplifying how technology can enable human hospitality.
Cloud adoption in the travel industry is not limited to established players like airlines and hotels. Startups like AeroCloud are using cloud-based AI tools to automate processes at airports, such as gate allocation and passenger prediction analytics. With enhanced efficiency, airports can accommodate more passengers, resulting in increased revenue and profits.
Infosys, an IT firm, has been helping Aeromexico modernize its applications and transition to the cloud. The move has allowed the airline to offer customers more self-service tools, including online platforms and airport kiosks for check-ins, improving the overall passenger experience.
While the travel industry has been slower to adopt cloud technology compared to other sectors, the pandemic has acted as a catalyst for change. Migration to the cloud accelerated during the pandemic, but now organizations are taking a more cautious approach, ensuring they strike the right balance between on-premises and cloud solutions. Despite the challenges, the travel industry has no choice but to embrace the cloud due to its growing prevalence and the investments being made.
For the travel industry to fully modernize, a shift in mindset is necessary. Organizations must empower their teams, provide the right tools, and foster a culture that encourages experimentation and the adoption of new technologies. As Morin from AWS emphasizes, belief in the solutions and a willingness to embrace change are essential for the industry to reach new heights.
In conclusion, the travel industry is catching up to other sectors in the adoption of cloud technology. While challenges exist, such as legacy systems and lower profit margins, the benefits of automation, operational efficiency, and improved customer experiences are too significant to ignore. With success stories from leading players like Delta Air Lines, Air Canada, Hilton, and even startups like AeroCloud, the travel industry is poised to embrace the cloud and unlock its full potential.
